Natty Bongoman
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The Citizen (Dar es Salaam)
Tanzania: Mineral Revenue Secrecy Fails Dar es Salaam in Global Ranking
Alvar Mwakyusa
19 October 2010
Tanzania has scored poorly in an international survey on mining revenue transparency.
The Revenue Watch Index 2010 places Tanzania 37th among 41 countries that were surveyed. The Revenue Watch Institute and Transparency International conducted the study between November 2009 and April, this year.
Tanzania scored 27.8 points out of a possible 100 points. Brazil tops the rankings on 97 points.
Tanzania exported 38.1 tonnes of gold worth $1.4 billion (Sh1.96 trillion at current exchange rates) between July 2009 and July 2010, accounting for about 43.5 per cent of total exports, according to the latest Bank of Tanzania monthly economic report. However, tax from these exports is not known as public disclosures have not been made mandatory.
The country opened up the mining sector in 1998 after enacting the investor-friendly Mining Act.
In Africa, Tanzania is ranked 12th behind Liberia, South Africa, Nigeria, Botswana, Gabon, Cameroon, Zambia, Sierra Leone, Sudan, Angola and Ghana. It is five places from the bottom of the global list ahead of Algeria, the Democratic Republic of Congo, Equatorial Guinea and Turkmenistan.
Reacting to the report, stakeholders from the academia and civil society said the findings reflected the true image of the industry, and called for immediate reforms to increase transparency.
"We have been advocating for both the publishing of major mining contracts and for higher mining royalties," Prof Marjorie Mbilinyi, an activist with the Tanzania Gender Networking Programme (TGNP), told The Citizen yesterday in Dar es Salaam.
She, however, urged the public to support the government in its endeavour to reform the industry, saying it was apparent that there had been donor pressure on the government whenever it intended to undertake comprehensive reforms.
Dr Honest Ngowi, lecturer at the Mzumbe University Business School, said Tanzanians were largely in the dark as far as the extractive industry was concerned.
"As Tanzanians, we don't yet know who owns what and what is being extracted and how much revenue the country is supposed to get...it is high time now that we asked ourselves what we want, and not what they (investors) want," he said.
The Tanzania Chamber of Minerals and Energy chairman, Mr Ami Mpungwe, said major mining companies have been playing their roles on transparency in accordance with the best international practices.
"There is no secrecy whatsoever...we are quite transparent. All of our members, such as Barrick Gold, AngloGold and TanzaniteOne, among others, are public listed companies and have nothing to hide," he told The Citizen.
Tanzania, the fourth largest gold producer in Africa, and whose gold mining regime has been the subject of popular resentment and criticism, has been grappling with the issue of transparency in the mining sector for a long time now.
This prompted the establishment a number of review committees and contracting of a foreign mining audit company to audit gold production, exports and revenue, among other things.
In 2009, Tanzania joined the Extractive Industry Transparency Initiative (EITI) as part of efforts to improve transparency in the mining sector.
However, the country has performed miserably in EITI criteria, according to the Revenue Watch Index 2010, scoring 16.5 per cent, the lowest score in index. Tanzania is being kept company at the bottom of the piles by Iraq, Yemen and Zambia. Ghana is the best performer among the 18 EITI countries surveyed, having scored 91.5 points.
But Mr Mpungwe said the government had shown it was committed to increasing transparency in the industry by joining EITI.
In 2003, the government contracted Alex Stewart Assayers to audit the quality and quantity of gold produced and exported, and determine its value and royalties due.
The firm's contract expired in 2007, and the government established the Government Audit Programme under the ministry of Energy and Minerals to carry out the functions.
According to the Revenue Watch Index 2010, the common features among countries in the scanty revenue transparency group are poor reporting on generation of revenues and low transparency on access to resources.
"Weak disclosure of information on those two sections brings down scores even for EITI participants such as DRC, Equatorial Guinea, Ghana and Tanzania," the report says, adding:
"Some countries like Tanzania and Ghana show above average scores in some sections like transparency of natural resources funds or institutional setting, but that does not compensate for poor or untimely disclosure of information on payments the government received in the sectors covered by this index."
The index measured areas such as access to resources, generation of revenue, institutional setting, existence of state owned companies and natural resources funds as well as sub national transfers and EITI.
The country is among eight countries in the world with limited information on revenue from the mining, oil and gas sectors, says the index.
The index assesses 41 resource-rich countries that contain almost half of the world population and are among the top producers of petroleum, gold, copper and diamonds including advanced industrial countries such as Norway and United States as well as countries that rank among the world's poorest despite being endowed with vast natural resources.
Political economists have noted that states that rely on oil, gas and mineral revenues may be particularly prone to mismanagement.
The index recommends that contract transparency needs to improve substantially in all resource rich countries.
Contracts, details about investment agreements and fiscal regime in the extractive sector should be open to public scrutiny, says the report, noting that licensing and contracting of access to resources is an area where disclosure of information is most limited.
The top five countries in the index are Brazil, Norway, Russia, Mexico and Chile.
LINK = http://allafrica.com/stories/201010190118.html
Tanzania: Mineral Revenue Secrecy Fails Dar es Salaam in Global Ranking
Alvar Mwakyusa
19 October 2010
Tanzania has scored poorly in an international survey on mining revenue transparency.
The Revenue Watch Index 2010 places Tanzania 37th among 41 countries that were surveyed. The Revenue Watch Institute and Transparency International conducted the study between November 2009 and April, this year.
Tanzania scored 27.8 points out of a possible 100 points. Brazil tops the rankings on 97 points.
Tanzania exported 38.1 tonnes of gold worth $1.4 billion (Sh1.96 trillion at current exchange rates) between July 2009 and July 2010, accounting for about 43.5 per cent of total exports, according to the latest Bank of Tanzania monthly economic report. However, tax from these exports is not known as public disclosures have not been made mandatory.
The country opened up the mining sector in 1998 after enacting the investor-friendly Mining Act.
In Africa, Tanzania is ranked 12th behind Liberia, South Africa, Nigeria, Botswana, Gabon, Cameroon, Zambia, Sierra Leone, Sudan, Angola and Ghana. It is five places from the bottom of the global list ahead of Algeria, the Democratic Republic of Congo, Equatorial Guinea and Turkmenistan.
Reacting to the report, stakeholders from the academia and civil society said the findings reflected the true image of the industry, and called for immediate reforms to increase transparency.
"We have been advocating for both the publishing of major mining contracts and for higher mining royalties," Prof Marjorie Mbilinyi, an activist with the Tanzania Gender Networking Programme (TGNP), told The Citizen yesterday in Dar es Salaam.
She, however, urged the public to support the government in its endeavour to reform the industry, saying it was apparent that there had been donor pressure on the government whenever it intended to undertake comprehensive reforms.
Dr Honest Ngowi, lecturer at the Mzumbe University Business School, said Tanzanians were largely in the dark as far as the extractive industry was concerned.
"As Tanzanians, we don't yet know who owns what and what is being extracted and how much revenue the country is supposed to get...it is high time now that we asked ourselves what we want, and not what they (investors) want," he said.
The Tanzania Chamber of Minerals and Energy chairman, Mr Ami Mpungwe, said major mining companies have been playing their roles on transparency in accordance with the best international practices.
"There is no secrecy whatsoever...we are quite transparent. All of our members, such as Barrick Gold, AngloGold and TanzaniteOne, among others, are public listed companies and have nothing to hide," he told The Citizen.
Tanzania, the fourth largest gold producer in Africa, and whose gold mining regime has been the subject of popular resentment and criticism, has been grappling with the issue of transparency in the mining sector for a long time now.
This prompted the establishment a number of review committees and contracting of a foreign mining audit company to audit gold production, exports and revenue, among other things.
In 2009, Tanzania joined the Extractive Industry Transparency Initiative (EITI) as part of efforts to improve transparency in the mining sector.
However, the country has performed miserably in EITI criteria, according to the Revenue Watch Index 2010, scoring 16.5 per cent, the lowest score in index. Tanzania is being kept company at the bottom of the piles by Iraq, Yemen and Zambia. Ghana is the best performer among the 18 EITI countries surveyed, having scored 91.5 points.
But Mr Mpungwe said the government had shown it was committed to increasing transparency in the industry by joining EITI.
In 2003, the government contracted Alex Stewart Assayers to audit the quality and quantity of gold produced and exported, and determine its value and royalties due.
The firm's contract expired in 2007, and the government established the Government Audit Programme under the ministry of Energy and Minerals to carry out the functions.
According to the Revenue Watch Index 2010, the common features among countries in the scanty revenue transparency group are poor reporting on generation of revenues and low transparency on access to resources.
"Weak disclosure of information on those two sections brings down scores even for EITI participants such as DRC, Equatorial Guinea, Ghana and Tanzania," the report says, adding:
"Some countries like Tanzania and Ghana show above average scores in some sections like transparency of natural resources funds or institutional setting, but that does not compensate for poor or untimely disclosure of information on payments the government received in the sectors covered by this index."
The index measured areas such as access to resources, generation of revenue, institutional setting, existence of state owned companies and natural resources funds as well as sub national transfers and EITI.
The country is among eight countries in the world with limited information on revenue from the mining, oil and gas sectors, says the index.
The index assesses 41 resource-rich countries that contain almost half of the world population and are among the top producers of petroleum, gold, copper and diamonds including advanced industrial countries such as Norway and United States as well as countries that rank among the world's poorest despite being endowed with vast natural resources.
Political economists have noted that states that rely on oil, gas and mineral revenues may be particularly prone to mismanagement.
The index recommends that contract transparency needs to improve substantially in all resource rich countries.
Contracts, details about investment agreements and fiscal regime in the extractive sector should be open to public scrutiny, says the report, noting that licensing and contracting of access to resources is an area where disclosure of information is most limited.
The top five countries in the index are Brazil, Norway, Russia, Mexico and Chile.
LINK = http://allafrica.com/stories/201010190118.html
